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广发证券:城改货币化安置推进 政策助力建材板块继续修复

GF Securities: Urban renewal monetization settlement promoted, policy assistance continues to support the construction materials sector repair.

Zhitong Finance ·  Oct 21, 2024 08:03

Affected by the weak real estate demand, the fundamentals of the building materials sector still lean to the downside. The current industry is facing a "weak reality", but the "weak expectations" have been continuously improving.

According to the data from the Zhixin Financial APP, GF Securities released a research report stating that due to the impact of weak real estate demand, the fundamentals of the building materials sector still lean to the downside. The current industry is facing a "weak reality", but the "weak expectations" have been continuously improving. With the continuous stability of the real estate by the central government, sector valuations are expected to bottom out, and the industry fundamentals need to wait for a recovery in real estate sales. Continuous policy catalysts are also expected to stabilize the real estate industry, being bullish on opportunities in the building materials sector.

Regarding the target companies, some high-quality leading enterprises still demonstrate strong operational resilience, such as strong resilience in retail building materials supported by second-hand housing and stock housing renovation demands, and significant excess profits for leading companies in cyclical building materials at the bottom. It is recommended to actively focus on the consumption building materials sector with strong growth potential and valuation elasticity, cement industry leaders at the bottom poised for price hikes, as well as opportunities for bottom allocation in the fiberglass industry and some structurally bullish sectors (overseas, pharmaceutical glass, etc).

GF Securities' main points are as follows:

Consumer Building Materials: Continuously strong policy support, strong operational resilience of industry leaders.

Consumer building materials have good long-term demand stability, continuous increase in industry concentration, and significant growth space in the long term for high-quality segmented leaders with good competition landscape. The downstream real estate market is still seeking a bottom, with the new construction area expected to have dropped to a low level in the medium term, waiting for stabilization and improvement in sales. Core leading companies have strong operational resilience. Bullish on Skshu Paint (603737.SH), Dehua TB New Decoration Material (002043.SZ), Beijing New Building Materials Public (000786.SZ), Zhejiang Weixing New Building Materials (002372.SZ), China Lesso (02128), Guangdong Dongpeng Holdings (003012.SZ), Beijing Oriental Yuhong Waterproof Technology (002271.SZ), focusing on Guangdong Kinlong Hardware Products (002791.SZ), Jianpai Home (001322.SZ), Monalisa Group (002918.SZ), Keshun Waterproof Technolgies (300737.SZ), Zhite New Materials (300986.SZ), Wangli Security (605268.SH).

Cement: Increase in demand on a month-on-month basis, significant price hikes in the southern region.

According to the China Cement Network, as of October 18, 2024, the national average price of cement is 409 yuan per ton, up 6.34 yuan per ton month-on-month, up 43.83 yuan per ton year-on-year; the national cement delivery rate is 55.2%, up 1.6 percentage points month-on-month, down 5 percentage points year-on-year. In mid-October, domestic cement market demand continued to increase month-on-month, benefiting from staggered production and industry self-discipline measures, as well as companies aiming to improve profitability, leading to continuing upward trend in cement prices. Currently, industry valuation is at historical lows, bullish on Conch Cement (600585.SH,00914) and Huaxin Cement (600801.SH,06655), focusing on CR Building Materials Technology (01313), Gansu Shangfeng Cement (000672.SZ), and Guangdong Tapai Group (002233.SZ).

Glass Fiber/Carbon-Based Composite Materials: Coarse yarn prices are stable with a wait-and-see attitude, while electronic yarn prices have slightly fallen.

According to Zhuochuang Information, as of October 17, 2024, the national average price of 2400tex winding direct yarn is 3665 yuan per ton, up 0.10% month-on-month, up 10.15% year-on-year. Traders and processing plants show little further stocking intentions, coupled with steady incremental supply, limiting short-term adjustment space for mainstream product prices; electronic yarn prices have fallen compared to last week, mainly due to new price negotiations at the beginning of the month, shifting negotiation focus lower; Glass Fiber sees a bottoming out of price hikes, and the prosperity of carbon-based composite materials continues to stabilize. Leading companies are significantly ahead, bullish on China Jushi (600176.SH), Jiangsu Changhai Composite Materials (300196.SZ), with a focus on Sinoma Science & Technology (002080.SZ), KBC Corporation (688598.SH).

Glass: Slowing price hikes for float glass, while photovoltaic glass inventory slightly increases.

According to Zhuochuang Information, as of October 18, the average price of float glass is 1257 yuan per ton, down 0.5% month-on-month, down 41.6% year-on-year; inventory is approximately 26.48 days, down 0.13 days month-on-month; mainstream order prices for 2.0mm coated panels are 12-12.5 yuan per square meter, down 2% month-on-month, with inventory of approximately 37.83 days, up 0.48 days month-on-month. Currently, the valuation of glass industry leaders is at a relatively low level, bullish on Zhuzhou Kibing Group (601636.SH), Shandong Pharmaceutical Glass (600529.SH), Flat Glass (601865.SH), Flat Glass Group (06865), Xinyi Glass (00868), Xinyi Solar (00968), focusing on Shandong Jinjing Science & Technology Stock (600586.SH), and LNBM - Landglass Technology Co., Ltd (301188.SZ).

Risk Warning: Risks of continued macroeconomic downturn, significant fluctuations in monetary, real estate, and other policies, risks of new industry production capacity exceeding expectations, risks of rapid increase in raw material costs, etc.

The translation is provided by third-party software.


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